Tag: Economics

When long-run average cost increases as output increases there are …….?

Select ONE answer:

1. Constant returns to scale.
2. Economies of scale.
3. Diseconomies of scale.
4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

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If Apple could produce more computers at lower long-run average cost by increasing the quantity of the inputs it uses, Apple definitely would experience …….?

Select ONE answer:

1. Decreasing marginal returns.
2. Economies of scale.
3. Increasing marginal returns.
4. Diseconomies of scale.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

This work is licensed under a Creative Commons Attribution 4.0 International License.

Economies of scale …….?

Select ONE answer:

1. Lead to rising long-run average costs as output increases.
2. Occur when management complexity brings rising average cost.
3. Occur if output more than doubles when capital and labor double.
4. Occur if output less than doubles when capital and labor double.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

This work is licensed under a Creative Commons Attribution 4.0 International License.

The long-run average cost curve is the …….?

Select ONE answer:

1. Change in total product divided by the change in capital when the quantity of labor is constant.
2. Relationship between the lowest attainable average total cost and output when both the 
plant size and labor are fixed.
3. Change in output resulting from a one-unit increase in the quantity of capital.
4. Relationship between the lowest attainable average total cost and output when both the 
plant size and labour are varied.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

This work is licensed under a Creative Commons Attribution 4.0 International License.

Increasing marginal returns means that as the firm expands its output, its …….?

Select ONE answer:

1. Long-run average total cost increases.
2. Long-run average total cost decreases.
3. Short-run average total cost decreases.
4. Short-run average total cost increases.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

This work is licensed under a Creative Commons Attribution 4.0 International License.

In the figure below, when 20 units are produced the marginal cost is?

Select ONE answer:

1. $8.
2. More than $8 and less than $16.
3. Less than $8.
4. None of the above answers is correct.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

This work is licensed under a Creative Commons Attribution 4.0 International License.

In the figure below, curve B is the ________ curve?

Select ONE answer:

1. Average variable cost
2. Average fixed cost
3. Marginal cost
4. Average total cost

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

This work is licensed under a Creative Commons Attribution 4.0 International License.